DOW Jones – Reversal in place or has entered a bearish territory ?

The below daily chart of Dow Jones, clearly indicates the importnce the 200 simple moving average has played. The moving average has entered a support turned into resistance mode. Highlighted on the chart is the significance of the technical tool since we now can pinpoint it’s pivot levels.

Improve your trading with our technical analysis webinars, online tutorials, and seminars.
Switch to a better broker with the Good Broker Guide

At current market prices direction is difficult to suggest since we are trading on the inside swing support area of 10,365. We need a penetration/close either above or below that to confirm a bearish environment or a bullish one. Currently prices seem to have entered a bearish selloff and seeking to move lower towards the psychological big figure of 10,000.

Furthermore prices have failed to close above the 200 moving average. This indicates further bearish momentum.  Any positivity can be only seen from oscillator analysis. This being the below charted MACD reading. Although we have numerous bearish signals MACD indicates that a reversal may be in place.

Specifically a bullish crossover has been performed where MACD has triggered  buy signal. Although we must not only rely on MACD as a buy or sell tool, this may be the signal that short sellers must be cautious at these levels.

Overall i remain neutral on the index. Any close above the 200 moving average at 10,800 signals a buy strategy with a target of 11.600. On the other hand a close below 10,365 signals a sell strategy with minimum target of 10,000.

The above references the authors opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

Master’s Degree focused in Finance from the Cyprus International Institute of Management. FX technical analyst with 10 years exposure on technical and fundamental analysis, and a Certified Financial Technician recognized by the Society of Technical Analysts as well as the International Federation of Technical Analysts. Furthermore I am a full member of the society of technical analysts. Qualified two quarters on Bloomberg FX forecasting on G13 currencies, 2Q 2018 4th position as well as a 7th position in 3Q 2018. Accomplished a 1st place on USDCAD globally for 3Q 2018.

Be the first to comment

Leave a Reply